So, you want to achieve financial freedom with real estate investing, but you’re a busy person with a demanding job and a lot of responsibility. You don’t have time to learn the ins and outs of putting together an advisory team, finding a good deal, or making decisions about the financing and management of a property. The fact is, you can STILL enjoy the benefits of real estate investing by becoming a passive investor in a multifamily syndication!
Doug Marshall is the founder and president of Marshall Commercial Funding, a firm dedicated to helping clients get the best possible financing for their rental properties. Doug has 36 years of experience as a mortgage broker, and he received his CCIM designation in 1999. His journey into passive investing began 10 years ago, and to date, he has invested in 11 properties—8 of which were apartment buildings. Doug is also the author of Mastering the Art of Commercial Real Estate Investing: How to Build Wealth & Grow Passive Income from Your Rental Properties.
Today, Doug joins me to discuss how he achieved financial freedom through passive investing in commercial real estate. He describes the difference between an active and passive investor, sharing his goals as a passive investor and the characteristics of an ideal candidate for passive investing. Doug also offers insight around his preference for multifamily over other asset classes and explains how to calculate the amount you need to invest for a particular cash-on-cash return. Listen in to understand the incredible tax benefits of real estate investing and get Doug’s take on the #1 thing passive investors should consider before handing their money over to a syndicator.
Key Takeaways
Doug’s path to financial freedom with passive investing
- 20 years living paycheck to paycheck
- Went into business for self as mortgage broker (3X income)
- Partnered with client as passive investor
The difference between active and passive investing
- Active investors make ALL decisions (team, management)
- Passive investors decide WHO to trust to achieve returns
Why Doug prefers multifamily over other asset classes
- Vacancies have less impact on returns
- Low vacancy rates during recession (5-10%)
The advantages of multifamily real estate investing
- Deferment of capital gains taxes
- Generates cashflow
- Opportunity to buy below market
- Depreciation limits income taxes
- Leverage properties to amplify return
Doug’s goals as a passive investor in multifamily
- No hassle of day-to-day decision-making
- Cashflow + upside appreciation
- Financial freedom (family trip to Scotland)
The ideal candidate for passive real estate investing
- Made good money over lifetime
- Desire to generate passive income
How to calculate the right amount to invest for retirement
- Living expenses minus social security benefits
- Cover difference with cash-on-cash return
The cash-on-cash return Doug looks for in a property
- 4-5% from start with value-add opportunity
- Up to 8% once improvements made
The most important considerations for passive investors
- WHO to invest with (vet syndicator for integrity)
- WHAT asset class to invest in
Connect with Doug
Resources
Podcast Show Notes
